ARTBA to Obama: Despite stimulus, 13 states cut investment

ARTBA says that the letter outlines the serious challenges facing the transportation design and construction sector and urges action as soon as possible on a robust, multi-year highway/transit reauthorization bill.

Highlights of the letter include the following:

Ruane urged President Obama to “make a $500 billion, six-year congressional reauthorization of the federal surface transportation program a first-tier, post-November election Administration priority. Failure to do so will increase the likelihood of a serious transportation construction market crash in 2011-2012 that will increase unemployment and negatively impact the nation’s economic recovery.”

“There are, however, disturbing leading indicators that portend a potential implosion of the transportation construction market in many states in the very near future — with resulting heavy job losses — absent leadership from Washington.”

“Despite the infusion of ARRA funding to every state last year, 13 states actually invested less money in new highway and bridge work contract awards during 2009 than they did in 2008….”“The picture for the first half of this year is even more disturbing…30 states and the District of Columbia have invested less in highway and bridge contract awards from January through June 2010 than they did over the same period a year ago….”

“This reduction in value of contracts let in 2009 and 2010 means the U.S. transportation construction market in 2011 and 2012 is likely headed for a serious downturn in perhaps up to half the states.”

“Many firms report they have worked down most, if not all, of their project backlog, with little new work available for bid.”

“For more than 50 years, the federal-aid highway and transit programs have been a model of responsible, stable and dependable government financing—user funded and deficit-neutral…That dependability, so critical to planning and executing construction projects that can take several years to complete, is now threatened by the lack of political will—on the part of both parties—that is necessary to enhance the revenue stream to the Highway Trust Fund to reflect today’s capital needs and market realities.”

[T]he Administration’s failure to yet produce even a statement of its “principles” for the reauthorization legislation, now almost a year after the underlying law expired, is inexplicable.”

“Mr. President, simply extending the current programs again for a year or more and either cutting federal investment to the level sustainable by the current revenue stream to the Highway Trust Fund — or continuing down the dangerous path of deficit spending to prop up the highway and transit investment programs — are not acceptable alternatives.”

“…we are standing in place as China, India, Russia and the European Union continue massive, strategic transportation investments to enhance their economic competitiveness. Now is the time to make the bold decisions on transportation investment that are necessary to ensure a strong and vital America for our grandchildren!”